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Morning Briefing for pub, restaurant and food wervice operators

Mon 24th Oct 2022 - Update: People changing socialising habits due to cost-of-living crisis, consumer confidence declines, temporary recovery visa call
Rekom – Nearly 90% of people will change or have already changed their socialising habits due to the cost-of-living crisis: Just under 90% (88.5%) of people will change or have already changed their socialising habits around going on a late night out, due to the cost-of-living crisis, according to the latest research from Rekom UK, the Peter Marks-led nightclub operator. The latest Rekom Night Index, the bellwether quarterly report for the late-night leisure industry, found that more than a third (35%) of Brits say increased prices mean they will significantly reduce the amount they will go out, as total night out spend rises to £73.36 (March 2022: £68.03). The survey also reveals that people are more conscious of their budgeting when it comes to a late night out. Nearly half (46.4%) of respondents said they have a rough idea of how much they want to spend in total per month, while 16.7% said they have a fixed amount in mind for the month they don’t exceed. Over two fifths (43.5%) identified pricing as one of the top factors to consider when deciding where to go on a night out. However, Rekom UK’s spend per head has increased by 16.5% over the past three months, and importantly, the survey highlights how nightclubs remain a significant thread to the fabric of our culture and society, particularly among younger generations. Unsurprisingly, students are the highest demographic of society that go out two-three days a week (33.2%) compared to full-time workers (18.7%). 18-24s are staying out the longest, with the data showing that an average night out for a Brit lasts just under five hours. When it comes to cost-cutting, 18-24-year-olds are adjusting their budgets mostly in how they prepare for a night out. 43.4% said they would pre-drink at home more, 38.2% will buy cheaper drinks to have at home, and 29.4% will cut down on clothes shopping and hair and beauty treatments ahead of a night out. The company said: “Although these changes are less relevant for the nightclub sector, more worryingly, they could have a broader impact on all elements of the high street across both day and night-time economies.” Marks, chairman of Rekom UK, said: “Clearly people are starting to consider the impact the cost-of-living crisis will have on their social lives and are putting budgets in place when planning a night out. However, I have confidence in the fact that while financial behaviours are changing, social habits are not. We know that as a nightclub business, we will remain resilient if we continue to prioritise well-invested propositions that are good value and relevant to our target audience. Because of this, our nightclubs continue to see a strong surge in attendance. This survey acts as an important reminder to all in the hospitality trade that we should prepare for consumer habits to change somewhat. It’s natural against the backdrop of a looming recession that people will choose to cut costs, but we must remember that people will always want to prioritise socialising with friends and come together to enjoy fun, shared experiences. If we continue to foster that clear enthusiasm for a night out, we will evolve and become stronger for it.” The research also found that entry fee spend increased 8.9% to £10.13 (March 2022: £9.30), drinks in venue increased 3.7% to £20.29 (March 2022: £19.56), while 25-34-year-olds spend the most, at £79.60 and 18-24 year olds spend the least at £69.60. The average duration of a night out has increased to 4 hours 35 from four hours 17 in March 2022, with those aged 18-24 spending the longest out at 5 hours and 1 minute, and those aged 25-34 and 55+ close behind at four hours and 56 minutes. Women spend much longer than men out on a late night out, at 5 hours 6 minutes compared to 4 hours and 37 minutes. Finally, 66.8% of people said spending time with friends was the main reason for going on a late night out.

Four days to go before release of updated Premium Database of Multi-Site Companies, 30 businesses being added: A total of 30 new multi-site companies, operating 190 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday (28 October), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes regional restaurant and hotel operators, growing bakery brands, and expanding franchise operators. Premium subscribers will also receive a 2,200-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,677 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 4 November, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes an 8,000-word report on the new additions to the database. Premium subscribers also receive access to the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group, and the UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

DCMS – The government should introduce a temporary recovery visa for industries where there are labour and skills shortages: The government should introduce a temporary recovery visa for industries where there are labour and skills shortages, according to the Digital, Culture, Media and Sport Committee’s (DCMS) ‘Promoting Britain Abroad’ report. The new report said that “damaging government action” was hindering tourism’s post-pandemic recovery. It also found that the removal of tax-free shopping for visitors from abroad was “both short-sighted and incredibly damaging” to UK tourism, with the decision to reinstate it then remove it again illustrative of “the lack of thought given to the (tourism) industry by the government”. UKHospitality chief executive Kate Nicholls said: “The DCMS committee is absolutely right to highlight the enormous value tourism offers to the UK economy, and hospitality is at the heart of that offering. Every part of the UK has something to offer tourists and we have a fantastic reputation as a country, but we should not rest on our laurels and we need to be globally competitive. For example, VAT remains much higher in the UK compared to our European counterparts. We would encourage the government to look at the cost benefits of lowering the rate of VAT and the introduction of tax-free shopping to redress this imbalance. The committee’s recommendation to introduce a temporary recovery visa is something UKHospitality has long been calling for. This would go a long way to helping recruitment challenges and would support the sector’s ability to provide fantastic service to all its customers. We would strongly urge the government to consider its introduction as part of a pro-growth review of immigration policy. The impression the UK can leave on visitors, in particular school visits, should not be underestimated and we also absolutely support the committee’s recommendation to allow single visas as part of educational visits.”

Consumers rein in spending as confidence falls to a record low: Consumer confidence has fallen to a record low as households cut back on leisure spending to save money amid soaring inflation. The Times reports confidence fell for a fifth consecutive quarter to its lowest level since 2011, when Deloitte began its consumer tracker. Sentiment among consumers fell to minus 20% on the index, compared with minus 9.7% in the same quarter last year, as households reduced spending on essential and non-essential goods. Further decline is expected over the Christmas period, usually a strong period of retail sales. The index, based on the responses of 3,226 adults, found that 30% of consumers are spending less, up from 21% in the previous quarter. Of those, 58% said that they were doing so to save money. The poll, taken on 17-18 September, shows that confidence had hit a record low even before Kwasi Kwarteng’s catastrophic mini-budget on 23 September. Inflation reached a 40-year high of 10.1% in September, as the soaring cost of energy pushed up the price of goods across the board. It is expected to have risen further this month, after energy bills rose by 27%. The cost of borrowing has also risen as the Bank of England battles inflation, pushing up mortgage repayments. Interest rates have risen from 0.1% last December to 2.25% and another rate rise is expected next month. More than half, 57%, of consumers are reducing their use of energy at home; 40% are spending less on clothes and shoes; and 39% are cutting down on going out and on leisure activities. Net spending on leisure fell two percentage points in the quarter to minus 12% as consumers limited their visits to restaurants, cafés, pubs, bars and entertainment venues. 22% of respondents said that they had ended, or planned to end, an entertainment subscription such as Netflix or Disney+. Simon Oaten, partner for leisure at Deloitte, said: “The hospitality industry has been one of the hardest hit in recent years. A reduction in typical festivities or diversion of these to [the] home will almost certainly take the shine off the ‘golden quarter’.”

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